So exactly how does a BORSA plan work? Good question. Below are the general steps for accessing your retirement funds early and without penalty.
DRDA CPAs & Business Consultants provides the BORSA (Business Owner's Retirement Savings Account) Plan which allows entrepreneurs to access retirement funds tax-free and penalty-free if they are going to buy, start, or add funds to a business.
The ability to do this is based in the Internal Revenue Code (IRC) and the ERISA Law of 1974 (specifically section 408(e) of ERISA). It's a two entity structure and it works like this:
1. DRDA establishes a C Corp for you
2. DRDA establishes a 401k Profit Sharing Plan for your C Corp
3. You can roll all of a plan, portions of a plan, multiple plans, and even more than one person can roll - none of that affects the fee or the timing. The funds will roll into the new account established for the new 401k plan
4. From the 401k plan you will make an investment decision. Instead of buying stock in somebody else's company you're going to buy stock in your own C Corp.
5. Once the funds are in the corporate checking account they are working capital and available for any purpose, to include leveraging against a loan - SBA or conventional.
The entire process takes roughly 30 days. I'd welcome the opportunity to discuss your capital needs. Give me a call at 281-954-6023.